Last year, digital advertising grew over 15% and nearly cleared $70 billion, according to eMarketer. The same study predicted that digital spend is expected to reach $100 billion by 2020. According to MediaRadar data, 121,821 brands placed digital ads in 2016. This significant growth is driven by many factors—one of which is header bidding.
This method of programmatic ad sales allows publishers to offer their inventory to multiple ad exchanges at the same time before making calls to their ad servers. By increasing bids on the same inventory at the same time from multiple demand sources, publishers have the opportunity to make more money. Today, more than 70% of publishers use header bidding.
Sounds like a no-brainer, right? So why aren’t all publishers taking advantage?
In order for header bidding to expand, technology must keep pace with evolving ad placement strategies. In this programmatic process, additional code must be added to web pages, slowing down page load time significantly. Header bidding “wrappers” have been introduced to maximize yield without sacrificing site performance, but the solution is not yet perfect.
To solve this issue, publishers should be bringing the bidding server-side, rather than in consumers’ browsers to drive faster load times and reduce lag on websites. Though valuable for publishers, header bidding should not be implemented at the expense of the user experience.
Should publishers be able to fix this problem, header bidding can be expected to almost entirely replace the traditional waterfall method of programmatic ad buying. This previous method of programmatic ad placement, where impressions are offered in one sales channel and if unsold, inventory moves down to a less valuable channel until a bid is made, is under scrutiny following concerns about ad safety.
By generating high yield and preventing loss of inventory, header bidding is much more efficient for publishers than previous methods. The proliferation of header bidding may just revolutionize the programmatic ad space for good.